Financial Conduct Authority
Reader’s Guide:
An introduction to the Handbook
November 2015
Reader’s Guide: An introduction to Handbook
Contents
Abbreviations used in this paper
2
What is the Handbook?
3
Where can I find the Handbook?
4
Structure of the Handbook
5
Content of Handbook modules
10
Status of provisions
11
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Reader’s Guide: An introduction to Handbook
Abbreviations used in this guide
FCA
Financial Conduct Authority
FSMA
the Financial Services and Markets Act 2000, as amended
Handbook
the Handbook of rules and guidance made by the FCA Board
PRA
Prudential Regulation Authority
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Reader’s Guide: An introduction to Handbook
1.
What is the Handbook?
1.1
The Handbook sets out the FCA’s legislative and other provisions made under powers given to
them by the Financial Services and Markets Act 2000, as amended (FSMA). The status of the
different types of provisions is explained in the next section.
1.2
The Handbook is made up of instruments made by the FCA Board to implement these provisions.
Instruments – the definitive version of the rules
1.3
Section 138G of FSMA requires the FCA to make rules made by the FCA Board publicly available,
in writing, by a ‘rule-making instrument’. Most other legislative provisions made by the FCA
(such as general guidance and codes) are also made by instrument.
1.4
We publish our instruments online to fulfil this statutory requirement. The definitive version of
the rules is the legal instrument and it is this text that should be used if there is any discrepancy
between the instrument and the website page text.
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Reader’s Guide: An introduction to Handbook
2.
Where can I find the Handbook?
2.1
Online: https://www.handbook.fca.org.uk/
2.2
Instruments within the Handbook website: http://www.handbook.fca.org.uk/instrument
2.3
In print: the Handbook can be ordered by subscription or on demand –
http://www.tsoshop.co.uk/
Interpretation tips
2.4
4
GEN 2 (Interpreting the Handbook) helps readers to interpret the Handbook. It provides guidance
on the way that the Handbook should be read in the light of the FCA’s particular regulatory
responsibilities and powers (see http://www.handbook.fca.org.uk/handbook/GEN/2/1.html).
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Reader’s Guide: An introduction to Handbook
3.
Structure of the Handbook
3.1
The Handbook is divided into the following blocks. The Handbook also contains a Glossary
of definitions which specifies what the legal meaning is of various phrases and wording used.
High Level Standards (overarching requirements)
3.2
This section of the Handbook contains the requirements for all authorised persons (firms) and
approved persons. It also contains general interpretive material.
• PRIN (Principles for Businesses) – fundamental obligations of all firms
• SYSC (Senior Management Arrangements, Systems and Controls) – regulatory management
requirements
• COND (Threshold Conditions) – minimum statutory criteria which a firm must satisfy to be
given and retain authorisation
• APER (Statements of Principle and Code of Practice for Approved Persons) – standards of
behaviour that we expect from approved persons
• FIT (The Fit and Proper test for Approved Persons) – minimum standards for becoming, and
remaining, an approved person
• FINMAR (Financial Stability and Market Confidence Sourcebook) – guidance to our
functions under the short-selling regulations
• TC (Training and Competence) – requirements for staff training and record keeping
• GEN – (General Provisions) – guidance and rules on how to interpret the Handbook,
disclosure and use of our logos
• FEES (Fees Manual) – provisions relating to the funding of the regulators, including the
Financial Ombudsman Service and the Financial Services Compensation Scheme
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Prudential Standards
3.3
Providing prudential and specific notification requirements for the sectors listed for each
sourcebook.
• GENPRU (General Prudential sourcebook) – for most business sectors
• BIPRU (Prudential sourcebook for Banks, Building Societies and Investment Firms)
• IFPRU (Prudential sourcebook for Investment Firms)
• INSPRU (Prudential sourcebook for Insurers)
• MIPRU (Prudential sourcebook for Mortgage and Home Finance Firms, and Insurance
Intermediaries)
• IPRU(FSOC) (Interim Prudential sourcebook for Friendly Societies)
• IPRU(INS) (Interim Prudential sourcebook for Insurers)
• IPRU(INV) (Interim Prudential sourcebook for Investment Businesses)
3.4
The foundation of many provisions within the Interim Prudential sourcebooks pre-date the
Financial Services Authority. We aim to incorporate them within other modules of Prudential
Standards in due course.
Business Standards
3.5
Day-to-day conduct rules that apply to firms, as specified.
• COBS (Conduct of Business sourcebook) – applies to all firms accepting deposits, conducting
designated investment business and carrying on long-term insurance business in relation
to life policies
• ICOBS (Insurance: Conduct of Business sourcebook) – applies to non-investment business
of insurers
• MCOB (Mortgages and Home Finance: Conduct of Business sourcebook) – applies to firms
conducting regulated mortgage activities and home finance
• BCOBS (Banking: Conduct of Business sourcebook) – applies to firms that accept deposits
from banking customers
• CASS (Client Assets) – rules and guidance on holding client assets and client money,
including requirements on segregation and safe custody of assets, statutory trusts for client
money and retrieving information in the event of insolvency
• MAR (Market Conduct) – mainly applies to wholesale and professional markets
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Regulatory Processes
3.6
These modules describe the operation of our supervisory and disciplinary functions, as well as
requirements on firms relating to the supervisory function.
• SUP (Supervision)
• DEPP (Decision Procedure and Penalties manual) – mainly about our decision-making
procedures and the giving of statutory notices, penalties and investigations
Redress
3.7
The modules in Redress outline the processes for handling complaints and compensation.
• DISP (Dispute Resolution: Complaints) – rules and guidance on how firms must handle
and process complaints and report complaints to the FCA. This module also covers the
operation of the Financial Ombudsman Service
• CONRED (Consumer Redress Schemes sourcebook) – details of redress schemes made
under section 404 of FSMA where there has been widespread or regular failure by relevant
firms to comply with requirements to a specific activity and consumers have suffered loss
which a court would remedy, e.g. CF Arch cru Diversified Funds and Investment Funds
• COMP (Compensation) – covers the Financial Services Compensation Scheme (FSCS)
Specialist sourcebooks
3.8
This part of the Handbook indicates to firms in certain sectors how the Handbook applies to
their business, e.g. collective investment schemes.
• COLL (Collective Investment Schemes) – material for investment companies with variable
capital (ICVCs) and authorised unit trusts (AUTs)
• CREDS (Credit Unions sourcebook)
• CONC (Consumer Credit sourcebook) – covers credit-related regulated activities
• FUND (Investment Funds sourcebook) – for firms covered by the Alternative Investment
Fund Managers Directive (AIFMD)
• PROF (Professional Firms) – requirements and guidance for lawyers, actuaries and
accountants when undertaking regulated activities
• RCB (Regulated Covered Bonds) – provisions made under the Regulated Covered Bonds
Regulations 2008
• REC (Recognised Investment Exchanges)
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Listing, Prospectus and Disclosure
3.9
Requirements for issuers listed on, or seeking admission to, the Official List of the UK Listing
Authority (UKLA), rules that apply to a sponsor and a person applying for approval as a sponsor,
as well as prospectus and disclosure document requirements.
• LR (Listing Rules)
• PR (Prospectus Rules)
• DTR (Disclosure Rules and Transparency Rules)
Handbook Guides
3.10
Guides for the particular types of firm as indicated in the titles, pointing the firms in the direction
of material in the Handbook that applies to them.
• EMPS (Energy Markets Participants)
• OMPS (Oil Markets Participants)
• SERV (Service companies)
• BENCH (General guidance on Benchmark Submission and Administration)
Regulatory Guides
3.11
These are guides to particular regulatory topics within the Handbook.
• COLLG (Collective Investment Scheme Information Guide)
• EG (The Enforcement Guide)
• FC (Financial Crime: a guide for firms)
• PERG (The Perimeter Guidance Manual) – covering circumstances when authorisation is
required or exempt person status is available, including activities regulated under the Act
and exclusions
• RPPD (The Responsibilities of Providers and Distributors for the Fair Treatment of Customers)
• UNFCOG (The Unfair Contract Terms Regulatory Guide)
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Forms
3.12
There are various supplementary forms to the Handbook which are included within the relevant
module. All of these forms are linked within the relevant sourcebook, but you can also find the
entire directory of forms at – https://www.handbook.fca.org.uk/form
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4.
Content of Handbook modules
4.1
Each sourcebook or manual is divided into chapters and sections. The general structure of the
majority of modules is as follows:
• Application and purpose – who the module applies to and the motive of that module
• Main content – substantive provisions to implement the purpose outlined above. This may
include relevant annexes and forms, where appropriate.
• Transitional provisions (TPs) – this section will:
–– set out the TPs for the module (if any)
–– specify which parts of the module the TPs relate to and when those TPs commence
–– detail the date that each TP comes into force and expires
• Schedules – split into the same structure throughout each module:
–– Sch 1: Record-keeping requirements
–– Sch 2: Notification and reporting requirements
–– Sch 3: Fees and other required payments
–– Sch 4: Powers exercised (now removed from most sourcebooks)
–– Sch 5: Rights of action for damages under FSMA
–– Sch 6: Rules that can be waived or modified
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5.
Status of provisions
ICON
What it means
R (Rules)
General rules, specialised rules and listing rules made under FSMA.
Most rules create binding obligations on firms. If a firm contravenes
such rules, it may be subject to enforcement action and action for
damages.
E (Evidential
Provisions)
Rules, but not binding in their own right, evidential provisions always
relate to some other binding rule – they are only binding in relation
to the rule to which they relate.
Compliance with an evidential provision may be relied on (when it
says so) as ‘tending to establish compliance’ with the rule to which it
relates.
Non-compliance with an evidential provision may be relied on (again,
when it says so) as ‘tending to establish contravention’ of the rule to
which it relates.
‘E’ is also used for paragraphs that make up the Code of Practice
for Approved Persons (APER 3) to show whether or not the
conduct of an approved person complies with the Statements of
Principle for approved persons.
G (Guidance)
Guidance in the Handbook is made under section 139A of FSMA
and is mainly used to:
•explain the implications of other provisions
•indicate possible means of compliance, or
•recommend a particular course of action or arrangement
Guidance is not binding and need not be followed to achieve
compliance with the relevant rule or requirement. However, if a
person acts in accordance with general guidance in circumstances
contemplated by that guidance, we will treat that person as having
complied with the rule or requirement to which that guidance
relates.
‘G’ is also used for our statements on:
•the procedure for giving statutory notices under FSMA, and
•policies on penalties and the conduct of interviews to which a
direction has been, or may be, given under FSMA
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Reader’s Guide: An introduction to Handbook
5.1
Directions and requirements given under FSMA and relevant
statutory instruments. These are binding upon the person or
categories of person to whom they are addressed.
UK (UK Legislative
material)
UK legislative material – Acts of Parliament, statutory instruments,
regulations and orders. Changes made to UK text (such as the use of
Handbook defined terms) are normally indicated by square brackets.
EU (EU Legislative
material)
EU legislative material – EU Directives, directly applicable EU
regulations.
The status and effect of EU provisions depends on its nature. Articles
of an EU Regulation are directly applicable to, and binding on, the
persons to whom they are addressed, whereas recitals in an EU
Regulation are not binding.
Firms should use the Official Journal of the European Union for a
comprehensive statement of their obligations under EU law.
P (Principles)
Statements of Principle for approved persons under FSMA which are
binding.
C (Conduct)
Under FSMA, we specify descriptions of behaviour which do not
amount to market abuse, which is specified within these provisions.
Notes
Notes provide informative, but non-legislative, material. Text is preceded by ‘Note:’ and
contained in square brackets within the legislative material or as a distinct paragraph. Where
the note consists of a reference to an EU Directive, this indicates that the associated legislative
text is subtantially derived from that EU provision.
5.2
Related documents and guides
The Prudential Regulation Authority Rulebook will be relevant for dual-regulated firms. Please
visit the following page to access the PRA Rulebook – http://www.prarulebook.co.uk/
5.3
Financial Conduct Authority general website – www.fca.org.uk
5.4
Website for firms – https://www.the-fca.org.uk/
5.5
5.6
5.7
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D (Directions)
FCA Handbook-related documents
Policy Development Updates
This provides an overview of forthcoming policy initiatives and papers which are publishing in
the near future, and which sections of the Handbook will be affected by these documents.
Handbook Notices
Monthly publication which provides an overview of all changes to the Handbook for that
month. This document also includes feedback to any relevant Quarterly Consultation Paper
instruments which have now been approved by the Board.
PDU and HN updates can be found on the following web page –
http://www.fca.org.uk/your-fca/list?ttypes=Handbook&ssearch=
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5.8
5.9
5.10
Discussion Papers
Initial documents raising a proposed Policy change within the FCA that may potentially affect
the provisions within the Handbook. These are usually published at least 6 months before any
change to the Handbook is made – http://www.fca.org.uk/news/list?ttypes=Discussion+Paper&
Consultation Papers
Proposals to change provisions within the Handbook – these documents explain why we are
planning to make amendments to the Handbook and ask stakeholders for feedback on such
proposals. We also provide a cost benefit analysis in CPs to show why we think the proposals
will benefit the industry and highlighting any potential costs that may result from such change
– http://www.fca.org.uk/your-fca/list?ttypes=Consultation+Paper&ssearch=
Policy Statements
Final document setting out the changes to the Handbook and summarising the feedback
received in the relevant consultation paper. This also provides a revised cost benefit analysis,
where necessary, and the reasons for changes to the consultation Handbook text –
http://www.fca.org.uk/your-fca/list?ttypes=Consultation+Paper&ssearch=
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